Smith v. Dep't of Workforce Serv., Workforce Appeals Bd., 20100014-CA.

CourtCourt of Appeals of Utah
Citation245 P.3d 758
Docket NumberNo. 20100014-CA.,20100014-CA.
PartiesKristy SMITH, Petitioner, v. DEPARTMENT OF WORKFORCE SERVICES, WORKFORCE APPEALS BOARD, Respondent.
Decision Date23 December 2010
245 P.3d 758

Kristy SMITH, Petitioner,
v.
DEPARTMENT OF WORKFORCE SERVICES, WORKFORCE APPEALS BOARD, Respondent.


No. 20100014-CA.

Court of Appeals of Utah.

Dec. 23, 2010.

245 P.3d 759

Kristy Smith, Salt Lake City, Petitioner Pro Se.

Geoffrey T. Landward, Salt Lake City, for Respondent.

Before Judges McHUGH, ORME, and VOROS.

OPINION

VOROS, Judge:

¶ 1 Petitioner Kristy Smith challenges a decision of the Workforce Appeals Board (the Board) assessing repayment and a statutory penalty against her for unlawfully obtaining unemployment benefits. We affirm.

BACKGROUND

¶ 2 Smith was separated from JetBlue Airways on December 31, 2008, as part of a reduction in force. At that time, JetBlue gave Smith a lump sum payment of $18,960.74 for her years of service and for unused vacation pay. On January 3, 2009, Smith opened a claim for unemployment benefits by telephone. An automated system asked if she had received or was entitled to receive any vacation or severance pay from her previous employer. Smith answered "no." Consequently, the Department of Workforce Services (the Department) awarded her an incorrect amount of benefits.

¶ 3 When Smith filed her claim for the week ending February 7, 2009, she acknowledged receiving the Department Claimant Guide (the Guide), which explains the procedures for claiming unemployment benefits. The Guide explains that all vacation, holiday, severance, or separation pay must be reported. After a cross-check disclosed the $18,960.74 payment, the Department contacted Smith. She acknowledged that she had received and reviewed the Guide. She also agreed that she was paid the $18,960.74 as reported by the employer. However, Smith stated that she thought the payment was a bonus and not reportable as earnings. Based on these facts, the Department determined an overpayment of $8,887 and also assessed a civil penalty in an equal amount based on a finding of fraud.

¶ 4 Smith appealed the Department's decision to an Administrative Law Judge (the ALJ), who conducted a hearing by telephone. At the beginning of the hearing, the ALJ asked Smith whether she had any witnesses participating in the hearing, to which Smith answered, "I have my husband as a representative." Smith did add, however, that her husband was "not really providing testimony"

245 P.3d 760
but was just there as "[r]epresentation." The ALJ mistakenly treated Smith's husband as a witness, requiring him to leave the room and shut the door behind him. Toward the end of the hearing, the ALJ asked Smith if her husband would provide any additional testimony. Smith replied, "You know nothing really. I mean he could testify that I don't look at the finances ... he runs all of that...." Smith's husband did not testify. The ALJ affirmed the Department's decision.

¶ 5 Smith appealed the ALJ's ruling to the Board, challenging the ALJ's finding of fraud and contending that the ALJ had erred in excluding her husband from the hearing. The Board upheld the finding of fraud. It also ruled that while the ALJ committed "a procedural error" by excluding Smith's husband from the hearing, there was not "any harm significant enough to require remand" to the ALJ because Smith "was able to articulate her testimony and evidence to the [ALJ], and on appeal [w]as ... able to reiterate those same arguments." Accordingly, the Board affirmed the findings and determination of the ALJ, including the repayment and civil penalty. Smith appeals that decision.

ISSUES AND STANDARDS OF REVIEW

¶ 6 Smith first contends that the Board lacked sufficient evidence to support a finding of fraud. An administrative agency's findings of fact will be reversed "only if the findings are not supported by substantial evidence." Drake v. Industrial Comm'n, 939 P.2d 177, 181 (Utah 1997). Substantial evidence is "more than a mere scintilla of evidence ... though something less than the weight of the evidence." Martinez v. Media-Paymaster Plus/Church of Jesus Christ of Latter-Day Saints, 2007 UT 42, ¶ 35, 164 P.3d 384 (omission in original) (internal quotation marks omitted). In addition, the agency's application of law to its factual findings will not be disturbed "unless its determination exceeds the bounds of reasonableness and rationality." Johnson v. Department of Emp't Sec., 782 P.2d 965, 968 (Utah Ct.App.1989).

¶ 7 Second, Smith challenges the exclusion of her representative from the Department hearing. Smith is entitled to relief if, on the basis of the agency's record, she was substantially prejudiced by the agency's wrongful action. See Utah Code Ann. § 63G-4-403(4) (2008).1

ANALYSIS

I. Sufficiency of the Evidence

¶ 8 First, Smith claims that there is insufficient evidence to support a finding of fraud. A claimant who knowingly fails to report a material fact on a weekly unemployment claim is not eligible for benefits. Utah Code Ann. § 35A-4-405(5)(a) (Supp.2010). Upon a finding of fraud, the claimant must repay amounts received together with a civil penalty equal to the amounts received. See id. § 35A-4-405(5)(a), (c). Neither the Board nor this court has the authority to alter the statutory penalty. See Utah Admin. Code R994-406-403; Diprizio v. Industrial Comm'n, 572 P.2d 679, 680-81 (Utah 1977).

¶ 9 Under the rules governing the Department, fraud is "a willful misrepresentation or concealment of information for the purpose of obtaining unemployment benefits." Utah Admin. Code R994-406-401(2). To establish fraud, the Department must show materiality, knowledge, and willfulness. See id. R994-406-401(1). Materiality is established when a claimant makes false statements or fails to provide accurate information for the purpose of obtaining any benefit to which the claimant is not entitled. See id. R994-406-401(1)(a)(i)(A). Knowledge is established when a claimant knew or should have known that the information submitted to the Department was incorrect or if the claimant failed to provide required information. See id. R994-406-401(1)(b). Finally, willfulness

245 P.3d 761
is established when a claimant files claims containing false statements or deliberate omissions. See id. R994-406-401(1)(c). An admission or direct proof of intent to defraud is not required. See id. R994-406-401(3).

¶ 10 Upon termination from JetBlue Airways on December 31, 2008, Smith was aware that she would receive a lump sum separation payment. The total amount, including some paid vacation, was $18,960.74. Nonetheless, when Smith opened an unemployment claim on January 3, 2009, she answered "no" to a question asking whether she had received or was entitled to receive any vacation or severance pay.

¶ 11 Smith contends that the evidence before the Board was insufficient to support a finding that she knew this statement was false. She asserts that she was unaware that her separation payment should have been included in her unemployment claim, as she was "never aware of the details of [her] pay or benefits." At the hearing, Smith testified that the payment was deposited electronically, that her husband was in charge of finances, and...

To continue reading

Request your trial
15 cases
  • Adams v. Dep't of Workforce Servs., Workforce Appeals Bd.
    • United States
    • Utah Court of Appeals
    • 16 August 2012
    ... ... 35A4405(5)(c). Both of these claims present a mixed question of law and fact. See Smith v. Department of Workforce Servs., 2010 UT App 382, 6, 245 P.3d 758 [285 P.3d 786] (reviewing the ... ...
  • Onysko v. Dep't of Envtl. Quality & Career Serv. Review Office
    • United States
    • Utah Court of Appeals
    • 26 March 2020
    ... ... No. 20180984-CA Court of Appeals of Utah. Filed March 26, 2020 Ryan B. Hancey and J. Adam ... Department of Workforce Services , 2013 UT App 59, 20, 300 P.3d 313 (quotation ... the outcome of the proceedings," 17 463 P.3d 686 Smith v. Department of Workforce Services , 2010 UT App 382, ... ...
  • Foye v. Labor Comm'n, 20161039-CA
    • United States
    • Utah Court of Appeals
    • 21 June 2018
    ... ... No. 20161039-CA Court of Appeals of Utah. Filed June 21, 2018 Aaron J. Prisbrey, ... Utah Dept of Nat. Res. , 2017 UT 15, 29, 393 P.3d 291; ... affected the outcome of the proceedings." Smith v. Department of Workforce Servs. , 2010 UT App ... ...
  • Smith v. Workforce Appeals Bd.
    • United States
    • Utah Court of Appeals
    • 10 March 2011
    ...‘only if the findings are not supported by substantial evidence.’ ” Smith v. Department of Workforce Servs., 2010 UT App 382, ¶ 6, 245 P.3d 758 (quoting Drake v. Industrial Comm'n, 939 P.2d 177, 181 (Utah 1997)); see also Utah Code Ann. § 35A–4–508(8)(e) (2005) (“In any judicial proceeding ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT